"8 Million Strong and Voting!" Small business is the heart beat of the United States economy. This blog searches for issues and answers to helping small business survive and thrive in California and the United States.

Monday, July 29, 2013

It is with great sadness that I let you know that
Small Business California Board member Lee Petillon died last
Friday at the age of 84. He was a giant in security law and in early
stage technology development. He was a prolific writer and author of
numerous pieces of legislation around security law. He also was my
friend helping me and other Board members to guide Small Business
California.

He will be greatly missed as he was one of the kindest
people I ever met and feel it was a privilege to know him.

Friday, July 26, 2013

The state is embarking on a project having to do with
independent contractors. This has been a big issue for small business that cuts
two ways.

First I have heard from some of you that you face
competition from competitors who are paying cash under the table. This is done
to avoid withholding and payroll taxes and in many cases your
competitors don’t have works compensation. I have also heard from some of
you that EDD will not go after businesses that you know are paying under the
table. What ideas do you have to address this?

Second I have heard from some of you that
you are not clear how to properly document independent
contractor status and some of you have been audited by EDD and ended up
paying penalties for lack of compliance. What can the state do to help
small businesses. Do you know what resources are available to you?

I welcome your comments on both issues.

Yesterday I received notice that I have been appointed to
the SBA National Advisory Board for the Small Business Development Centers. I
am representing District IX. This includes Arizona,California,Guam Hawaii and Nevada.
I welcome any comments about the SBDC program.

Thursday, July 25, 2013

Are any of you aware of small
businesses being put out of business by the Federal government. See story
below. Do you have any thoughts?

Are any of you aware of
situations where the state has taken away business from small businesses. I
know some of the small businesses selling food products to the government have
lost business because prisoners are selling to government agencies. It is my
understanding they can’t even bid on this.

I hope you’re doing well. We’re working on a story and
wanted to get your thoughts on it. The story concerns a small business owner
who is one of many across the country who will soon be out of business due to
the Federal Government’s decision to sell their product themselves instead of
continuing to contract out to sell their product. In this case the product is
coffee, and it’s the VA who is canceling contracts for some businesses that
have coffee shops inside the VA. They’re now going to be selling Starbucks
brand coffee in their cafeterias instead of having him there selling his
product which he has been for the last fifteen years.

How do you feel about a business being taken over by the
feds

How often do the feds do this kind of wholesale takeover
when independent contractors seem to be doing a fine job on their own?

What could be next – would other concession businesses be in
the governments away?? Have they already gone away? Newstands? Shoe
shiners?

What’s next?

Below is an article on this incident and background info
– let me know.

Thx.

Mike

Coffee Shop Owner:
Getting Shut Down by V.A., Starbucks

By Gabrielle Karol

Published May 22,
2013

FOXBusiness

Reuters

There's a coffee
war brewing inside America's V.A. Medical Centers that threatens to oust
long-established mom-and-pop businesses in favor of a Starbucks-affiliated
chain.

At stake is more
than a cup-o'-Joe - for a lot of vendors, it's their livelihood.

Ken Gilmore, who
owns and operates Epiphany Coffee and Tea, which for 15 years has been serving
up coffee and snacks inside the V.A. Medical Center in Sacramento, California,
says the government-run agency has not extended his contract, and instead will open
a PatriotsBrew, a chain shop already operating in more than 115 V.A. Medical
Centers.

Stacy
Papachrisanthou, the director of marketing and communications for the Veterans
Canteen Services (VCS), says the conversion of contractor-run coffee shops into
PatriotBrews comes from the desire to offer veterans and their families "a
more consistent assortment" of healthier snacks and beverages, including
Starbucks brand coffees.

Over the past five
years, the PatriotBrew initiative has converted 30 coffee shop contractors to
PatriotBrews. Papachrisanthou says when the vendors' contracts are up, they're
given notice that their shops will change over to VCS management. At that
point, owners and their employees are offered the opportunity to become
employees of PatriotBrew.

That's one offer
Gilmore says he can refuse.

Gilmore says he
currently makes $3,300 a month running Epiphany Coffee and Tea - and the salary
at PatriotBrew would only be $15 an hour.

"I'm the sole
supporter of my family - I can't pay my mortgage on $15 an hour," says
Gilmore. Even though the position would come with the benefits given to federal
employees, Gilmore says the switch still wouldn't be worth it.

He adds he's been
trying to cut back on stress since having two heart attacks, but the idea of
having to start over In 90 days has been weighing heavily on his mind.

Will Veterans Pay
the Price?

Gilmore says he
sees the decision to oust contractors as financially motivated, rather than
stemming from the desire to provide vets with more healthy options.

He says he has a
contact within the V.A. who told him, "If they run everything and have
licensing with Starbucks, they end up potentially making more than just having
a vendor run it. It's my understanding that prices will be higher."

While higher
prices could be less affordable for veterans patronizing the V.A.'s coffee
shops, more revenue for the V.A. could help provide better services to
veterans.

Papachrisanthou
says the difference in price from contractor to PatriotBrew depends on the
prices set by individual vendors.

In the case of the
Sacramento V.A., Gilmore's hunch may be correct. He currently charges $1 for an
8 ounce cup of coffee, while Anthony Goolsby, the manager of the Los Angeles
V.A. Medical Center's PatriotBrew, says that the price for a cup of coffee
starts at $2 and goes all the way up to $5 for something more elaborate, like a
latte or a cappuccino.

"I've tried
to keep prices lower for the veterans," says Gilmore. "It's an
opportunity to give back to those who serve the country, and a lot of them are
on fixed incomes and can't afford a lot.

"I see the same people over the years, and I love hearing
their stories."

Tuesday, July 23, 2013

Please see below job creation in California . It is clear that
businesses in with 1 to 4 employees[micro businesses] are the major net
job creators in the state. SB Cal Board member Terry Bibbens provided
this information. He is a nationally known expert in job creation studies.

This is an up to date ranking of
bank lending to small businesses. Where does your bank rank?

Friday, July 19, 2013

You all know that the state is about $10 billion in debt to the Federal Government for its payments on Unemployment. The Governor has put forth a proposal to solve this problem. Legislation will be introduced with the Governors proposal. It includes an increase in the Unemployment tax for employers and an increase in the cap which is currently $7000. It also addresses fraud.

I think you can safely expect an increase in the Unemployment tax in the future.

My question to you is what is your experience with employees filing for Unemployment? Have you been successful in fighting an unemployment claim?

Have you had employees lose in their initial claim only to be overturned on appeal? Do you fight claims or just let them go through?

Tuesday, July 16, 2013

As part of a robust education and outreach effort, the Small Business Administration and Small Business Majority are launching the Affordable Care Act 101 weekly webinar series. Small business owners can learn the basics of the Affordable Care Act and what it means for their company and employees, including insurance reforms, the small business health care tax credit, the new health insurance marketplaces, and employer shared responsibility provisions. Each week, SBA representatives will walk through the key pieces of the law so that small business owners can understand the facts and make the best, informed decisions they can about providing health insurance for their employees.

The Affordable Care Act 101 will take place every Thursday from now through the opening of the marketplaces in October. Below are the registration links for the next four presentations. Registration for later webinars will be available shortly.

If you have any questions, please contact Chris Van Es at Christopher.vanes@sba.gov. Please forward this announcement to any interested stakeholders.

You all have heard me talk about Volunteers In Medicine and the free clinics around the country using volunteer doctors, nurses, dentist and lay volunteers that serve the working uninsured. We have over 11000 volunteers Nationally. I along with Janet Reilly we opened one of these clinics called Clinic by the Bay in SF and I serve as Vice Chair of the National program.

I just heard today we opened our 95th clinic. It is located in Columbia South Carolina. We now have VIM clinic in 29 states. For more information go to www.volunteersinmedicine.org

Tax reform is heating up in Washington D.C. and a proposal being floated by a number of policymakers is to limit interest deductibility, a key component of the tax code for businesses. Today, the BUILD Coalition released a new study that shows California takes a billion dollar hit if interest deductibility is limited to pay for tax reform(see our state-by-state impact analysis here ).

Overall, this Ernst & Young study found that limiting interest deductibility to pay for tax reform reduces economic growth in all industries; yet, it is being considered by Congress, Treasury, and a number of advocates as a way to raise revenue to lower tax rates.

This is a key issue within tax reform and would be interesting to your readers, especially business owners who understand the issue who are monitoring DC’s efforts on reforming our tax code.

Tuesday, July 09, 2013

Small Business California helped the National Association of Credit Management develop a Commercial Credit Reporting fact sheet for small business It is entitled What every Every Company Needs to Know and provides small businesses the information they need to be able to manage their companies commercial credit profile.

Subject: BREAKING NEWS: Employer Mandate Delayed One Year - Hot off the press from PBGH Policy Team

Importance: High

Attention Members: Bill Kramer just received the following email alert from POLITICO and we wanted to get the information out ASAP.

The Obama administration is delaying by one year the employer mandate to provide workers with coverage, according to a report by Bloomberg News.

It said two administration officials explained that the decision to push off the requirements until 2015 will come in regulatory guidance to be issued later this week. The move is a nod to employer groups, who have been asking for more time to implement the mandate.

Administration officials were not immediately available to confirm the report.

Our Policy team will continue to monitor the situation and provide additional details as they become available.

The return to work piece below is a summary of State Funds guidelines. A link is provided for additional information.

One of the most effective ways to control workers’ compensation costs is to implement a return to work (RTW) program. An RTW plan can help an injured employee make an independent and successful return to work as soon as possible following an injury.

The longer injured employees are off work, the more likely they are to become permanently disabled. Injured workers who don’t return to work within 6 months have only a 50 percent chance of ever returning to the job held when they became injured. If the absence lasts more than a year, the chances of that employee returning to work drop to less than 10 percent.

Return to Work Programs Benefit Employers and Employees

A win-win situation for both the injured worker and the employer, an RTW program can reduce claims costs by getting the injured worker back on the job sooner through temporary modified duty. Numerous studies have shown that employees recover faster when they return to work.

RTW helps keep life as normal as possible for injured employees while they recover and integrate back into work. Economically, RTW may be able to help the employee retain stable income, benefits, and seniority. Additionally RTW helps the employee by reducing negative psychological effects such as disillusionment or anger at the loss of physical abilities or the ability to achieve career goals, and by fostering the positive effects of job security and interaction with friends and coworkers.

By implementing an RTW program you can:

• Improve morale among all employees.

• Gain control and increase potential for a positive resolution of the claim.

For more information, please see link: http://www.smallbusinesscalifornia.org/RTW%20Program.pdf

I think you all know that California Unemployment is in debt about $10 billion to the Federal government. Small Business California is working with other business organization to find solutions to the problem. See below projected charges for California employers.

Employer’s Federal Unemployment Tax (FUTA)

Tax Year Annual Federal Tax Increase

Percent

(+ 0.3% per year) Tax Increase Per Employee $21 per year Total Increase for Employers Statewide

About Me

Small Business California is a proactive, non-partisan business advocate whose only agenda is the well being of California’s 3.2 million small businesses. Working for all small businesses for a better business environment, SB-Cal is responsive to the needs of small business owners.
Section 6033(e) Notice and Disclaimer:
Small Business California engages in lobbying activities on behalf of its members. Approximately 35% of your dues contribution goes to support these lobbying activities, and, we believe, is not deductible as a business expense under Section 162(e) of the Internal Revenue Code. Please consult your own accountant or tax attorney.